Schenectady Nightclub Owners Get Prison Time for Pandemic Relief Scam

ALBANY, NEW YORK – A Schenectady couple got a taste of justice today for their brazen scam to defraud COVID-19 relief programs, netting them over half a million dollars in loans meant for struggling businesses.

Deborah Budhraj, 52, and her husband Adesh Budhraj, 54, of Ballston Lake, New York, were sentenced to time served, to be followed by 2 years of supervised release, for conspiring with each other to defraud loan programs meant for businesses struggling with the financial effects of the coronavirus pandemic. United States Attorney Carla B. Freedman and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.

The couple, co-owners of a combination restaurant, bar and nightclub in Schenectady (called “Establishment A” in court documents), had contractually agreed to sell this business to another couple (“Couple A”) in February 2020. They received most of the purchase money – $265,720 – from Couple A the following month. Despite the sale not being finalized until August 2021, Couple A became the managers of Establishment A as of about March 2020, and assumed day-to-day responsibility for its payroll and other ordinary expenses.

But Deborah and Adesh Budhraj had other plans. Without Couple A’s knowledge, they applied for two Paycheck Protection Program (PPP) loans issued by banks and one Economic Injury Disaster Loan (EIDL) issued by the SBA, between April 2020 and June 2021. The loans totaled $558,514 and were meant to support Establishment A and its employees during the pandemic. However, the couple had no intention of using the loans for Establishment A’s expenses, and instead used the funds for impermissible purposes, including on real estate transactions and personal expenses.

Deborah also fraudulently obtained forgiveness of the two PPP loans by falsely certifying that the loaned funds were spent in accordance with PPP rules. The FBI investigated this case, and Assistant U.S. Attorney Michael Barnett prosecuted this case. The couple was ordered to each pay a $5,000 fine, and to pay $558,514 in restitution to the U.S. Small Business Administration (SBA), which they paid prior to sentencing.

The Attorney General established the COVID-19 Fraud Enforcement Task Force in May 2021 to combat and prevent pandemic-related fraud. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.